* Dollar steadies after falling since start of week
* "Hard Brexit" fears send sterling down again
* Investors await Trump's news conference on Wednesday
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Jemima Kelly
LONDON, Jan 10 The dollar recovered from earlier
losses on Tuesday, on the view the market had over-reacted to
worries about U.S. President-elect Donald Trump's first news
The dollar had fallen as much as 1 percent against a basket
of currencies since the start of the week. Investors had
fretted that Trump - who takes office on Jan. 20 - could shake
markets at Wednesday's press conference by taking an aggressive
line on issues such as trade policy and relations with China.
But the dollar had steadied by 1230 GMT, with the index
trading flat at 101.89. The euro, which had earlier hit an
11-day high above $1.06, was also flat at $1.0580.
Nordea currency strategist Niels Christensen, in Copenhagen,
noted that Trump had taken a relatively conciliatory tone in his
victory speech, and would be more likely to make the kinds of
radical, off-the-cuff comments that investors fear via other
channels, such as social media.
"Trump can make remarks more or less all the time, but I
think when it is an official press conference, he will have been
briefed and he might not be as inclined to go off and make some
radical statement," Christensen said.
"So the market had got a bit ahead of itself about the press
The dollar index has climbed 4 percent since Trump's
election on Nov. 8, as investors bet his promised programme of
fiscal expansion will boost inflation and growth, leading to a
faster pace of interest rate rises from the Federal Reserve.
Boston Federal Reserve President Eric Rosengren on Monday
called on the U.S. central bank to step up the pace of its rate
increases from the once-a-year pattern it has pursued since
2015, warning of inflation risks if it does not.
At a separate event, Atlanta Fed President Dennis Lockhart
said it was too early to judge how the incoming Trump
administration may change the path of the economy.
"The Fed has stressed this enormous uncertainty (around
Trump), so ... the main driver right now (for the dollar) is not
monetary policy, because monetary policy will react to what
we're going to hear from Donald Trump in the next couple of
weeks," said Commerzbank currency strategist Esther Reichelt, in
Disquiet over whether Britain will undergo a "hard" exit
from the European Union - in which immigration controls get
priority over access to the single market - kept pressure on
sterling, which hit a 10-week trough.
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(Additional reporting by Tokyo markets team, editing by Larry